Having Two Kids in China Isn’t Cheap

WHY YOU SHOULD CARE

Because the cost in cold, hard cash only scratches the surface of the cold, hard human costs of China’s one-child policy.

September 19, 2013

Vocal opposition to China’s 1979 one-child policy has been growing among its citizens, but for the foreseeable future it remains the law of the land. Yet where there’s a law, there’s a loophole — especially where determined would-be parents are concerned.

$50,000

Amount some Chinese parents are paying to have their second child born in the U.S. (airfare, medical costs, accommodation) Source

$34,600

Average “social maintenance fee” charged to a Shanghai couple that chooses to have a second child in China (varies by region) Source

300%

Proportion of annual income that fee represents for an urban couple; increases with income Source

300 million

Estimated number of births prevented by the one-child policy since the early 1980s Source

$314 billion

Estimated revenue generated from social-maintenance fees by the Chinese government since 1980 Source

Compare to the current enterprise value of Google: $240 billion Source

Parents who bring a second child into the world are charged a “social maintenance fee” by the Chinese government. The exact cost of the fee varies by region, but it is universally several times a couple’s average annual income. In 2012, one couple paid a record 1.3 million yuan ($204,114) to have their second child. The Chinese government has collected an estimated 2 trillion yuan ($314 billion) through these fees since 1980, yet there is very little information about how the fees are spent.

And now the city of Wuhan, in central China, plans to extend the levy to any unwed mother who’s unable to identify the father of her child — regardless whether it’s her first or second.

The consequences for parents who do not pay the social-maintenance fee? Their newborn child becomes a nearly invisible citizen, ineligible for equal access to basic services like education and medical care.

But ponying up for this fee isn’t the only way Chinese families are finding a way to expand. Wealthy couples and, increasingly, even moderately well-off folks are turning to maternity tourism.

By going abroad to give birth, couples may be able to sidestep the one-child restriction — but it costs nonetheless: around $50,000 for a birthing trip to the U.S. Plus, parents still have to pay a fee for their “foreign” offspring to access services back in China. The bonus? Any child born in the States gains the option to return to claim full citizenship at any time. Maybe even bringing mom and dad along, once they’re eligible for green cards after their child turns 21.

It’s quite an expensive, complicated process that many argue is long past archaic, not to mention cruel. With China’s low birth rate and rapidly aging population — there will be only two workers per retiree by 2030 — how long will it be before China overthrows this vestige of the Maoist era? Perhaps the Chinese government will turn the trillions it has extracted in social-maintenance fees into baby bonuses for the next generation, making expanding a family a prudent choice rather than a luxury.